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Propensity is defined as a natural tendency. An example of propensity is an inborn love for writing. pl. -Â·ties. 1  a natural inclination or tendency; bent.  Obs. favorable inclination; bias (for)
Definition. An economic term for the amount that consumption changes in response to an incremental change in disposable income. Equal to the change in consumption divided by the change in disposable income that produced the consumption change. â The marginal propensity to consume was observed to be significant for specific goods as the volatile economy affected life greatly.